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Assume the arbitrage pricing theory holds for only one risk factor and two portfolios X and Y. Portfolio X has a beta of 1.4 and

Assume the arbitrage pricing theory holds for only one risk factor and two portfolios X and Y. Portfolio X has a beta of 1.4 and an expected return of 9%. Portfolio Y has a beta of 0.8 and an expected return of 6%. What must be the risk-free rate in this market? a. 2% b. 3% c. 5% d. 0%

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